Tag Archives: local government

Most of us have done it at some time—when given negative feedback we become defensive and find excuses for the actions that are being criticised, or we turn it around and criticise those who are criticising us. Criticism is never easy to take. It’s an understandable reaction, and one that is just as common in organisations as it is in individuals.

A decade or so ago I was working for a large unitary authority when its first Comprehensive Performance Assessment (CPA) results were announced. They had been rated as ‘weak’—the second lowest of five possible ratings. Rather than acknowledge the failings and focus on how to improve, the initial response of the the Leader of the Council was to brand the decision as unfair and criticise the Audit Commission’s approach to assessment[1].

More recently, the Francis Inquiry into the Mid Staffordshire NHS Foundation Trust noted that the Trust has failed to take notice of multiple warning signs and found a culture of defensiveness, inward looking and lack of openness to criticism to be major contributors to the extensive problems there. The report observes:

The Trust’s culture was one of self promotion rather than critical analysis and openness… It took false assurance from good news, and yet tolerated or sought to explain away bad news (para 1.7)[2]

and continues:

…the Trust was an organisation that lacked insight and awareness of the reality of the care being provided to patients. It was generally defensive in its reaction to criticism and lacked openness with patients, the public and external agencies (para 1.114)[2]

Denying criticism may not always lead to the atrocious failures that happened in Mid Staffordshire, where some reports estimate up to 1,200 patients may have died as a result[3], but it is surely not the action of an organisation focused on learning and continual improvement.

Feedback is a vital part of learning, whether that be for individuals or organisations. It illuminates our blind areas and increases our self-awareness[5]. It helps us to identify areas that need improvement that we may otherwise have missed. It can provide valuable information for reflection, feeding in to and complementing the cycle of learning described by Kolb[4] (see figure). Today’s environment is in a constant state of change and organisations cannot afford not to be learning[6]. This requires an outward focus—the rest of the world is an essential learning resource—and a willingness to learn from mistakes[7]. Feedback, both good and bad, represents valuable external knowledge and a successful organisation will recognise this and be able to assimilate and apply that knowledge[8]. Organisations that have a strong learning culture accept negative feedback as willingly as they do positive feedback and use it as a source of reflection with a view to improving. In contrast, organisations that deny the validity of negative feedback are unlikely to learn from it and miss a valuable opportunity.

This is not to say that the targets of regulators and inspection bodies are always right. I’ve already noted some of the adverse effects that targets can have on organisational performance. But it would be foolish to throw out the baby with the bathwater. Even amongst a collection of seemingly meaningless targets the feedback about why those targets were missed may provide valuable intelligence that will help improve services further. Even if you don’t believe that what is being measured is useful, this does not mean that there are not valuable lessons that can be learnt from the process. The good organisation will not focus solely on the regulators’ targets—it will have its own more rounded concepts of excellent service delivery, seeing hitting targets as merely a by-product of being good at its core purpose. It will use any and all feedback that it can get to feed into the process of working out how to get better at that purpose.

Of course, getting negative feedback is not easy for employees who have worked hard to deliver a service. It is the job of leaders to maintain morale and to support the staff through this. This is not achieved by being defensive or drawing inwards. In the long term this only means the certainty of disappointing results next time too, and it sets a poor example for individuals’ learning. The leader’s role is to encourage, not stifle, learning[9]. Leaders need to work to establish a culture of continuous development, to emphasize the positives that can be drawn from learning and to motivate and empower employees to work together to find new solutions[10]. They should not be making excuses. They should put up their hands and admit the mistakes, and ask how they can do better next time.

How can we justify the inefficiencies and unnecessary overheads of two tier areas and tiny unitaries in the current financial climate – when cuts are having a real impact on the most vulnerable?[1]

But is the assumption that big is better necessarily true? With Britain’s largest council, Birmingham City Council, in dire financial straits[2] perhaps it’s time to question the belief that larger authorities are more efficient.

When two small district councils, Babergh and Mid Suffolk, considered whether they should merge they compiled a detailed business case which suggested that a merger would save council tax payers around £1.8m annually across a combined general fund budget requirement of around £20m[3]. What is conspicuous by its absence in that business case is any discussion of the impact that merging might have on outcomes. The implicit assumption appears to be that outcomes will remain the same, thus allowing the reduced costs to be claimed as efficiency. Let’s consider some of the reasons why this might not be the case.

Allocative efficiency

To explain what I mean by allocative efficiency, we’ll look at an almost topical example. To keep our food bill down we achieve economies of scale by buying a lot of our food in bulk from a wholefood wholesaler. A few weeks ago we were compiling our bi-monthly order and with Easter approaching we wondered whether we should buy a box of six chocolate eggs. It would have saved us a fair bit on buying eggs individually from a retailer. The problem is that the nephews like their chocolate sweet and milky, we prefer it dark and at least 70% cocoa, and the in-laws are partial to a spot of white chocolate. So buying a crate of identical eggs would have meant that most people didn’t have the chocolate experience they would have liked. We’d have pushed down our inputs, but outcomes would have suffered.

This is a very real danger with merging authorities. A bigger council may enable economies of scale, but economies of scale assume that the same service is right for everyone. Different areas have different problems, different populations and different aspirations. The ability of a council to respond to the preferences of its citizens should sit at the heart of any measure of performance[4] and smaller, more decentralised units may provide better opportunities for greater responsiveness[5][6].

Leadership and staff engagement

During my career in local government I’ve worked for both a large unitary and a small district. The contrast in the culture of the two organisations, and in my sense of engagement and ability to influence outcomes, could hardly be more marked—I was far happier in the small district. It would be foolish to generalise from this one personal observation and there may be many factors other than organisational size involved. Nevertheless, there is evidence that transformational leadership is more prevalent in smaller organisations[7] and there is evidence that transformational leadership enhances staff commitment, engagement and performance[8][9].

Staff are at the heart of public service delivery and the ability to deliver services efficiently depends on their commitment and engagement. Merging councils threatens this commitment and may actually result in reduced productivity as a result.

Size and the ‘new model’ for public services

In her blog post, Catherine discusses a new model for public services being developed by INLOGOV. Key to this new model is building capacity within communities themselves, facilitated by public bodies building stronger relationships with them[10]. But is merging authorities going to facilitate stronger relationships between communities and councils? Studies in Scandanavia suggest that larger political units have lower levels of non-electoral participation[11], lower levels of political trust and lower satisfaction[12]. Larger councils are likely to feel more distant to citizens, with elected members representing larger numbers of constituents. The job of building trust will be all the more difficult, threatening any potential improvements in outcomes that the new model might deliver.

The new model discussion paper observes

Perhaps the behaviour which really needs to change first, so other change can follow, is that of people in the public sector.[10]

It is difficult to disagree. I am not arguing that things should stay the same. There is no doubt that the public sector has to get smarter in delivering better outcomes for less. It needs radical change in the way in which it approaches service delivery. It needs to work more closely with communities both to ensure outcomes are aligned with community aspirations and to enhance the capacity of communities themselves. It needs changes in approach and culture throughout. But creating larger authorities is unlikely to facilitate this change.

Babergh District Council and Mid Suffolk District Council (2011). Detailed business case for staff and service integration, and for the creation of a new council [Online]. Babergh and Mid Suffolk District Councils. Available from: http://apps.csduk.com/CMISWebPublic/Binary.ashx?Document=9600 [Retrieved 3 April 2013] [↩]

Wallis, JJ and Oates, WE (1988). “Decentralization in the public sector: an empirical study of state and local government.” In: Fiscal federalism: Quantitative studies [Online]. University of Chicago Press. pp 5–32. Available from: http://www.nber.org/chapters/c7882.pdf [Retrieved 4 April 2013] [↩]

Eric Pickles says that local government must become more efficient[1]. It’s nothing new. Sir Peter Gershon was saying the same thing back in 2004[2] and increasing efficiency was an important driver of the public sector reforms of the Thatcher era[3]. We all need to work hard to increase productivity, but how do we know if we’ve succeeded?

Productivity goes up if the ratio of outcomes to inputs increases. Outcomes are not what is actually produced, but the satisfaction that a customer gains from these[4]. So in a bed factory the inputs are labour, materials etc, the outputs are beds and the outcomes are a good night’s sleep. Directly measuring the value of a good night’s sleep is quite hard, but the market gives us a pretty good idea by showing what a customer is prepared to pay for a bed. Consequently it’s common in the private sector to use outputs as a proxy for outcomes when assessing productivity.

The outputs and outcomes of local government are not generally traded in the market, so assessing their value is rather more difficult. Let’s consider how we might go about assessing the value of outcomes from one particular local government service, that of managing public trees.

There are some particular problems with this area. Firstly, trees grow slowly. The effects of changes in the way they are managed can take many years to become apparent. The effects of planting a new tree at a particular place will not be fully apparent for several decades, in much the same way as the effect of education on a person’s job prospects and salary lags well behind the actions of a school teacher. Secondly, the outcomes of managing public trees are many and disparate, and often difficult to disentangle from other causes. They can range from a sense of well being[5] to cleaner air[6][7], reduced crime[8], reduced CO2 emissions[9], flood mitigation[10], increased economic activity[11] and more[12]. Thirdly, whilst value in the private sector is usually viewed from the perspective of a consumer, many of these values are wider and can be characterised as being social or environmental[13].

One potentially straightforward way to assess efficiency gains in the public sector is to assume that output is equal to input and to establish an indicator of service quality. A given increase in quality over the base line can then be quantified by reference to the baseline input[4]. However, given the complex nature of the outcomes of tree management, establishing an indicator that reflects overall performance would be difficult. Furthermore, the delayed impact suggests a need to be able to account for anticipated future benefits.

The concept of Social Return on Investment (SROI) has gained some support recently[14]. SROI uses financial proxies to monetise the outcomes of activities that have social benefits and can be used either evaluatively or to forecast future value[15]. If suitable proxies can be found it could offer a way forward.

The i-Tree system may help provide those proxies. Developed by the USDA Forest Service, i-Tree is a software modelling package that can be used to estimate the value of a range of benefits, including energy and CO2 saved, stormwater runoff, air quality and increases in house values[16]. Its use so far in the UK has been limited and the two publicised studies, in Torbay and Edinburgh, restricted themselves to estimating the value of carbon storage and air quality[17][18]. Benefits are context sensitive—the savings on air conditioning costs deriving from shade trees are likely to be rather more in San Fransisco than in Sheffield for example—and much of the work on monetising benefits has been done in the US. Further work is needed to adapt i-Tree to the UK context, but it shows some promise as a means of monetising the outcomes of urban forestry.

A significant problem remains, however. The UK valuation figures are based largely on avoided costs—societal costs of poor air quality, notional costs of “non-traded carbon”[18]. As such they do not represent the value that citizens attach to urban trees. One aspect of the US model, house prices, can be said to represent citizen based value in that it represents a revealed preference, but beyond that the views of citizens are largely absent from the system. Given that so much of the value of urban trees can be seen as social and environmental it may be appropriate that valuation is not based solely on citizens’ views, but is it right that those views are excluded altogether?